Climate change has become a pressing issue for the investment industry, with many funds exposed to the risk of disruptions caused by a transition to a low-carbon economy. This is particularly true for Shariah-compliant index funds, which tend to have higher carbon intensity levels. In light of these circumstances, the goal of the present thesis is to investigate the feasibility of reducing the carbon footprint of a Shariah-compliant ETF while minimizing the annualized tracking error. Utilizing the methodology proposed by Andersson et al. (2016), this study demonstrates that it is possible to achieve a 46% reduction in carbon intensity over a 7-year period, while maintaining a low annualized tracking error of 0.12%, similar annualized volatility to the benchmark, and improved annualized returns.